Paul Reilly has walked this tricky path before: an outsider who's recruited to take the reins of a nationally known corporation from the hands of a no-nonsense CEO in charge for decades, one whose name is on the front door as part of the founding family. • Reilly, who joined Raymond James Financial as president in May, is being groomed to become CEO when Tom James steps down a year from now after 40 years of running the St. Petersburg-based brokerage. • Sounds eerily familiar to Reilly's last career twist. While running accounting giant KPMG International, he was tapped in 2001 to become CEO of Korn/Ferry International upon the exit of co-founder Richard Ferry, who had run the place for 36 years. • Reilly insists the parallels end there. Korn/Ferry was a turnaround situation, prompting him to aggressively cut jobs and reshape the company until it eventually retook its crown as the country's biggest executive recruitment firm. • No similar slash-and-rebuild is in the works for Raymond James, insists Reilly, an affable 55-year-old who grew up in St. Petersburg and watched Raymond James grow from a local operation into one of the country's largest independent brokerage firms.

"We've got a very good management team here. … It's the only super regional (brokerage) that's left in the country. … I don't see any fundamental changes," Reilly said in his first extended interview since being named to the post. "Even though this economic crisis has had mass layoffs, we continue to recruit people here."

Reilly guided his share of front office transitions during six years as executive recruiter at Korn/Ferry. He acknowledges that Raymond James' yearlong plan to pass the CEO baton "is not typical."

"A lot of times it doesn't happen because of ego," he says. The incoming CEO doesn't want his predecessor hanging around, second-guessing him or undercutting his authority.

In this case, the shift doesn't even seem like an outsider transition. It's more akin to a father entrusting his business to a son.

Tom James and Paul Reilly have known each other for decades, ever since Reilly was a kid playing tennis on the clay courts of St. Petersburg's Bartlett Park.

James, who stayed close to Reilly and his family for years, brought him onboard in 2005. A year ago, he became chair of the Raymond James audit committee. In October, James approached Reilly to gauge his interest in becoming chief executive.

James said he was drawn to Reilly as a successor because of his "immense energy" and leadership skills. "He won't do it the way I did it; I don't expect him to do that," James said. "God forbid he works 100-hour weeks."

It wasn't money that enticed Reilly to Raymond James. Through his years leading both Korn/Ferry and KPMG, he has made tens of millions. In 2008, his final year as Korn/Ferry's chairman, his compensation totaled about $2.3 million. (And though his compensation while running KPMG was not publicly reported, Reilly has indicated it trumped his Korn/Ferry pay.)

He also dismissed speculation that there were sour feelings among Raymond James' insiders who were passed over, namely chief operating officer Chet Helck, who was the company's president until Reilly's appointment. Reilly said Helck was one of the most ardent voices urging him to take the top job.

Resume and roots

Reilly's resume reads like a walking contradiction. He never used his CPA certification to work as an accountant, yet he ran KPMG, one of the country's largest accounting firms with more than 100,000 employees worldwide. He wasn't schooled in executive recruitment when he took over at Korn/Ferry. Never a stockbroker or financial planner, he nonetheless was tapped for Raymond James' executive team.

And there's the contradiction closest to his heart: He's the global traveler who never truly left his St. Petersburg home.

His duties at KPMG and Korn/Ferry took him on the road more than 200 days a year — even working out of Amsterdam for a while — but he kept returning to the bay area. During his CEO stint at Los Angeles-based Korn/Ferry, Reilly kept St. Pete as home base as he commuted around the world.

It's a family thing.

Reilly's four brothers and three sisters and their extended families all live in the bay area. Many of them, including Reilly, still regularly gather on Sundays at Mom's house.

The Reilly clan had moved from suburban Chicago to the St. Petersburg area in 1956 when Paul was 2 years old.

The family patriarch, Dr. Leo E. Reilly, settled in as a pathologist at St. Anthony's Hospital. Nearly every day, Paul Reilly trekked from St. Joseph's grade school to Bartlett Park to play tennis.

Jeff Davis, a local consultant with USTA Florida, frequently played tennis with the Reillys at area courts and at the family's own court at their Lakewood Estates home.

Davis recalls Paul, who is five years his senior, as being good-natured, mature, tall like all the Reillys, and very competitive.

Back then, the tennis crowd gathered for a touch football game every year around Christmas. Typically, Paul would be captain of one team and Reilly's brother Mike, now a physician in St. Petersburg, would captain the other squad.

"Inevitably, even before the game would start, the two of them would get into an argument about something … a rule or something," Davis said. "They were so competitive. It was really hilarious."

Along with a host of siblings, Reilly graduated from St. Petersburg's Bishop Barry High School, forerunner of St. Petersburg Catholic.

After getting his bachelor's and master's degrees from the University of Notre Dame, he returned to St. Pete, quickly becoming active in downtown development.

At first he was on his own, but longtime developer Ian Irwin persuaded him to become partners. A string of projects ensued, including building the Plaza in downtown St. Petersburg and renovation of the old Kress Building on Central Avenue. He was an early advocate of the edifice now called Tropicana Field, home of the Tampa Bay Rays.

In 1986, the Times ran a brief profile of Reilly as one of "21 Top Pinellas Business People," saying the young developer was being called "brilliant and savvy by old-timers." Also among the chosen 21 in the article: Tom James.

In 1987, Reilly sold his real estate operation to KPMG. He was credited with bolstering the firm's real estate consulting group and was elevated to run its audit and tax service, then promoted to CEO.

But when KPMG spun off its consulting business to focus on its core tax auditing practice, Reilly felt it was time to leave. The firm, he reasoned, was better off in the hands of an accounting professional rather than a non-practicing CPA who doesn't even do his own taxes.

When he arrived at Korn/Ferry in 2001, the executive search business was in a slump. Reilly shuffled top management, promoting internally as well as bringing in other outsiders. In building revenues and eclipsing rival Heidrick & Struggles as No. 1 in the industry, Korn/Ferry also benefited from demographics: An aging baby-boom generation led to many high-level job openings throughout the country.

Different styles, but ...

Reilly may be best known outside the office for tennis, but in the corporate world he borrows more often from another of his hobbies: chess.

He's soft-spoken and likes to methodically weigh options before striking, bringing in diverse viewpoints and considering their counsel.

James, by contrast, can be blunt, direct and quick in making decisions.

"People who meet us would probably say we're very different," Reilly acknowledges, "but there are more similarities than differences." Both are detail-oriented; both are decisive once a direction is plotted.

"I might be a little more calm on the exterior, but people who know me say I'm fairly intense," Reilly adds.

Perhaps most important for the future of Raymond James, both James and his CEO-in-training say the same thing when asked how they set corporate priorities: The customer comes first.

"That focus," Reilly said, "has really kept Raymond James safely out of a lot of problems in this industry."

Not that it hasn't been grappling with some tough issues during this prolonged recession: skittish brokerage clients; a first-ever loss inside the company's Raymond James Bank unit as its pool of nonperforming loans nearly doubled to $143 million; and customer outrage over how it handled a national meltdown in the market of auction rate securities.

The auction rate trades, long-term debt instruments designed to trade like short-term securities, were often pitched to investors as safe and easily redeemable. Then amid the credit crunch last year, the $300 billion auction rate market suddenly seized up.

Some other brokers offered to cover customer losses. But Raymond James angered some clients this year in telling them it wasn't providing a bailout, that it doesn't have "anything near" the $1 billion outstanding owed by clients.

"We had an industry that just got way overleveraged. Some were overleveraged by a 30 to 1 ratio" of debt to capital, he said. Raymond James peaked at closer to an 8 to 1 ratio, or 10 to 1 if its banking unit is included.

Last week, for the second year in a row, Raymond James was named the country's best full-service brokerage in Smart Money magazine's annual broker survey.

It's the kind of kudo managers take pride in, given the firm's core mission.

"At our heart we're a retail brokerage firm,'' Reilly said. All other profit centers, including loans doled out from the banking side, are supposed to flow from that.

As the auction rate securities incident underscored, assuaging investors in these turbulent times is difficult. But the upswing on Wall Street this spring has been encouraging.

"We take comfort that the capital markets appear to be strengthening, but we all don't know," Reilly said. "I don't think any of us know what's going to happen."

Changing of the guard

Though he calls himself a "steward" of the Raymond James brand, that doesn't mean Reilly envisions himself as a short-timer. He hopes to stay awhile, perhaps until he turns 65 in 10 years.

Tom James has timed his departure for next May, when he turns 68. He'll remain board chairman but the depth of his activism, he says, depends partly on what tasks Reilly has for him.

James plans to detach his Blackberry "umbilical cord" to the office, even as he keeps a keen watch from afar on how the company fares. "I'm still a very large shareholder and will continue to be chairman of the company, assuming the good Lord enables me to do that, so I will be watching over, as will my sons."

That's just fine with the CEO-in-waiting.

"Keeping Tom around is best for the company," Reilly says. "I hope he's around a long, long time."

Times researcher Will Gorham contributed to this report. Jeff Harrington can be reached at jharrington@sptimes.com or (727) 893-8242.

Paul C. Reilly through the years

1954 Born in Chicago suburb of Evanston.

1956 Reilly's family leaves Illinois; his father, Dr. Leo E. Reilly, starts a longtime career as a pathologist at St. Anthony's Hospital in St. Petersburg.

1980s Involved in a succession of redevelopment projects in St. Petersburg area, initially in a partnership with Ian Irwin, who renovated the former Kress Building. With JK Financial Corp., he helps to develop the Plaza downtown; tours country as president of Southeast Capital Consulting Co.

1986 On local team that wins national title at the USA League Tennis National Championships

1987 Sells local real estate development company to accounting giant KPMG International; begins holding a series of senior positions in real estate and financial services for the firm.

1990 Becomes president of the St. Petersburg Area Chamber of Commerce

1998 Named CEO of KPMG International

2001 Joins executive recruiting firm Korn/Ferry International as CEO

mid-2007 Steps down down as Korn/Ferry CEO, remaining board chairman.

May 2009 Named president of Raymond James Financial with plans to succeed Tom James as CEO in 2010.

Reilly at a glance

Title: President and CEO-in-waiting, Raymond James Financial

Age: 55

Family: Married with three daughters.

Interests: Tennis

Board affiliations: National Leadership Roundtable on Church Management Board; Students in Free Enterprise; Our Lady of Divine Providence House of Prayer Inc. Board; University of Notre Dame's Mendoza Graduate Alumni Board and College of Science Advisory Council.

Reilly on how he compares to Raymond James' current CEO, Tom James: "I might be a little more calm on the exterior, but people who know me say I'm fairly intense."